Basic Economic System of China (eBook)

Foreword 6
Contents 11
Introduction 16
Quantitative Analysis 28
1 Inaccurate Understanding of the Basic Economic System in the Primary Stage of Socialism: Reasons and Countermeasures 29
1 Consensus on Ownership 29
2 Inaccuration in Understanding 31
2.1 Market Fundamentalism 31
2.2 Marxian Fundamentalism 33
2.3 Neutralizing Ownership 34
3 Reasons of the Inaccuration 34
3.1 Why Do Some Favor Non-public Ownership? 34
3.2 Why Do Some Over-Emphasize Public Ownership? 39
3.3 Comprehensive Reasons 42
4 Measures to Correct the Mistakes 44
4.1 In-Depth Studies Should Be Performed on the Details of the Basic Economic System in the Primary Stage of Socialism 44
4.2 Attention Should Be Directed to Quantitative Studies on the Ownership Structure and the Basic Facts in the Relevant Aspects Should Be Clarified 45
4.3 The Public Economy Should Be Placed Reasonably in the National Economy with the Establishment of an Objective and Fair Evaluation System on SOEs Meanwhile, In-Depth Studies Should Be Performed on the Optimal Market Structure for Various Industries and the Progression of the SOE Reform Should Be Staged Scientifically Together with a Set of Standards to Regulate the Fields SOEs Are Involved in
4.4 The Goals at Each Stage of the Ownership Adjustment Must Be Quantified 46
4.5 Qualified Market Mainstays Should Be Fostered While the Internal Structure and Mechanisms of Enterprise Governance Should Be Strengthened to Improve the Core Competitiveness and Production Efficiency of SOEs 46
4.6 The Legal System Must Be Fortified and the Operation of the Market Economy Must Be Strictly Supervised 47
2 Rethinking Economic Theories 48
1 Theoretical Questions Brought up by the Debate of GJMT 48
2 Is There an Unambiguous, Naturally Occurring Border Between SOEs and POEs? 52
2.1 Worldwide Empirical Evidence of SOE Distribution 53
2.2 Theoretical Explanation of Empirical Evidence 53
2.3 Preliminary Conclusions 58
3 Do SOEs Invariably Have Lower Efficiency Than POEs? 58
3.1 The Core Problem in Efficiency Comparison 59
3.2 Cases from U.K.: Different Criteria, Different Pictures 61
3.3 Comments on the Results of Multi-leveled Empirical Studies 63
3.4 Preliminary Conclusions 65
4 Is There a Moderate Ownership Structure? 66
3 General Trend in the Structural Adjustment of Ownership and the Current Situation 69
1 Ownership Structure: Course of the Reform and Data Description 69
1.1 Tracking and Staging the Reform 70
1.2 Trend in the Adjustment and the Current Situation: Data Description 77
1.3 Current Situation of the Ownership Structure: Assets and Employment 81
1.4 Distribution of Ownership Types: Industries and Regions 90
2 Analysis and Evaluation on Performance of Variously-Owned Economies 92
2.1 Productivity of Variously-Owned Economies 93
2.2 Profitability of Variously-Owned Economies 96
2.3 Innovation Capabilities of Enterprises with Various Forms of Ownership 101
2.4 Contributions by Ownership: Job Creation and Tax Revenue 107
3 Conclusions 113
Appendix 116
4 Methods to Estimate Ownership Structure: A Literature Review 121
1 Denotations of Public and Non-public Ownership 121
2 Connotations of Public and Non-public Ownership 123
3 Indicators to Measure Public and Non-public Economies 127
4 Data to Measure Public and Non-public Economies 129
5 Methods to Measure Public and Non-public Economies 131
5 Quantitative Evaluation on Publicly- and Non-publicly-Owned Economic Structures: Estimation Based on Economic Censuses 134
1 Limitations of Estimation Methods in Literature 135
2 Data Description 137
3 Method Improvement 138
3.1 Calculating Total Assets: Methods and Results 139
3.2 Calculating Ownership Structure of Output (GDP) 140
3.3 Estimating the Ownership Structure of Employment 143
4 Result Analysis 145
4.1 Asset Ownership Structure 145
4.2 Ownership Structure of GDP 146
4.3 Ownership Structure of Employment 147
5 Further Explanation of the Results 148
5.1 Importance of the Results 148
5.2 Comments on the Methods 149
5.3 Defining the Primary Industry 150
6 Quantitative Estimation on Dominance of China’s Public Economy 151
1 Public and Private Assets in Primary Industry: Methods and Results 152
1.1 Ownership Structure of Rural Non-land Assets 152
1.2 Calculating Land Assets 155
1.3 References in Economics of Estimating Arable Land Asset Value 157
2 Extended Estimation on Public and Private Operating Assets in Secondary and Tertiary Industries: Methods and Results 158
2.1 Estimating Ownership Structure of Secondary and Tertiary Industries: Methods and Results 159
2.2 Explanations of Estimations of Publicly- and Non-publicly-Owned Assets in Secondary and Tertiary Industries 165
2.3 Comparison with Asset Structures Internationally 167
3 Publicly-Owned Economy in Dominance Is Tolerant of Contributions by Non-publicly-Owned Economy 168
3.1 Calculating Economic Output (Value Added) 169
3.2 Calculating Employment Contribution 174
4 Thoughts on the Development of Ownership Structure in China 179
Appendix 184
Discussion on Policies 190
7 Perfecting Laws to Fully Protect Property Rights 191
1 Property Rights and Economies: Annotations of Theories 191
1.1 Property Rights Are at the Core of Ownership 192
1.2 Protection of Market by Law Ensures Its Decisive Role in Resource Allocation 194
1.3 Confidence of Economic Stability Comes from Protection of Private Properties from Violation 196
2 Evolution of Laws and Regulations to Protect Property Rights in China 198
3 Orientation of Policies to Provide Real Protection of Property Rights 200
8 Rationalizing Institutional Mechanisms, Developing Mixed Ownership 202
1 Economy of Mixed Ownership: Tracking Back to Concept Origin 202
2 Foundations for Accelerating Development of Mixed-Ownership Economy 205
2.1 Demand in the New Stage for Completing and Consolidating the Basic Socialist Economic System 205
2.2 Mixed-Ownership Economy Has Become an Important Part of China’s Economy 207
3 Traps in Reforming SOEs with Mixed Ownership 208
3.1 Effectively Protecting the Rights of Investors, Especially the Small- and Medium-Sized 208
3.2 Exerting Precise Control of and Influence on the Mixed-Ownership Economy by State-Owned Capital 210
9 The SOE Reform in China’s New Normal: Problems and Suggestions 212
1 Problems Accumulated During the SOE Reform 212
1.1 Coexistence of Reform Achievements and Negative Images 213
1.2 Absence of Owners and Lack of Supervision 214
1.3 Differentiation of SOEs and Persistent Lower Efficiency Than Non-SOEs 216
1.4 Unfair Distribution of Profits Increases Income Inequality 217
2 Suggestions on Deepening the SOE Reform 218
2.1 Integrating Strengthening SOE Leadership by CPC and Perfecting Enterprise Governance 218
2.2 Stepwise Accumulation of State-Owned Assets in Non-competitive Fields and Differential Supervision of SOEs 219
2.3 Perfecting Laws Pertaining to State-Owned Asset Management, Pushing for Reforms on SOE Governance 220
2.4 Strengthening SOE Monitoring, Preventing Loss of State-Owned Assets 221
2.5 Perfecting the Modern Institution of Property Rights, Accelerating the SOE Reform by Mixed Ownership 223
2.6 Establishing a System of Internal Distribution Compatible with Incentives Step by Step 223
2.7 Establishing and Perfecting a System to Restore “Public Nature” of SOEs and a Mechanism of Sharing Gains of SOEs with the People 224
10 Carrying on the Reform to Promote Development of the Non-publicly-owned Economy 225
1 Grounds for Supporting Non-publicly-owned Economy 225
1.1 Theoretical Certainty 225
1.2 Practically Reasonable 227
2 Factors Inhibiting Non-publicly-owned Economy 228
2.1 Rapid, but Imbalanced Growth with a Huge Gap to Publicly-Owned Economy 228
2.2 Powerful Institutional Barriers with “Glass Doors” and “Spring Doors” Still Present Despite New Policies to Promote Development of the Non-public Economy 229
2.3 Policy Imbalance and the Bottleneck Effect of the Resource Factor 231
3 Measures to Promote the Non-publicly-owned Economy 232
3.1 Persisting in Combination of Adjustments to Existing Economy and Reforms to Bring Increments to Promote Continuous Growth of Macro-economy of Mixed Ownership and Micro-enterprises with Mixed Ownership 232
3.2 Persisting in Combination of Loosening up on Control and Strengthening Supervision and Constructing a Good Relationship Between Market and Government 233
3.3 Realizing Self-perfection, Transition and Upgrade 234
Bibliography 235